THYROID HORMONE REGULATION OF ADULT INTESTINAL EPITHELIAL STEM CELL DEVELOPMENT DURING METAMORPHOSIS. During intestinal metamorphosis, as the larval epithelial cells undergo apoptosis, the adult epithelium develops. Currently, the origin of the adult epithelial stem cells are unknown, although some evidence support the idea that they are derived from dedifferentiation of larval epithelial cells. We have previously isolated sonic hedgehog (Shh), a cell-cell signaling molecule, as a direct TR target genes during intestinal remodeling. Furthermore, Shh is highly expressed in the proliferating adult epithelial cells during metamorphosis. These results suggest that Shh is involved in the larval-to-adult remodeling of the Xenopus laevis intestine and is likely play a role in the development and/or proliferation of adult epithelial stem cells. Indeed, organ culture studies have allowed us to show that exogenous Shh enhances epithelial cell proliferation. Shh signal is known to be regulated at posttranslational levels in other animal species. In particular, the pan-hedgehog inhibitor, hedgehog interacting protein (Hip), has been implicated to regulate Shh signaling. Using real-time RT-PCR and in situ hybridization, we have now shown that Hip expression is transiently upregulated during both natural and TH-induced metamorphosis and that Hip mRNA is localized in the connective tissue adjacent to the adult epithelial primordia expressing Shh. Interestingly, the expression of bone morphogenetic protein (BMP)-4, a Shh target gene, is very low where Hip is strongly expressed, suggesting that Hip regulates Shh signaling. Finally, we have demonstrated that Hip binds to the N-terminal fragment of processed Shh in vivo, suggesting that Hip suppresses Shh signaling through sequestering Shh and thus plays a role in regulating the spatial and temporal signaling of Shh during intestinal stem cell development and proliferation.